Nigeria’s cash outside banks hits N4.87trn

The cash held outside Nigeria’s banking system rose to N4.87 trillion in August 2026, reversing three consecutive months of decline and raising fresh questions about the pace at which Nigerians are shifting from physical cash to digital payments.

Latest Central Bank of Nigeria (CBN) monetary data show that currency outside banks increased by N70.9 billion, or 1.48 per cent, from N4.80 trillion in July. The July figure had represented an eight-month low.

The August rebound followed a substantial decline between May and July, when cash outside banks fell from N5.19 trillion to N4.92 trillion and subsequently to N4.80 trillion—a cumulative reduction of about N391.8 billion.

Despite the latest increase, the August figure remains N381.3 billion below the N5.25 trillion recorded in January. However, compared with August 2025, cash outside banks has increased by roughly N419 billion, or 9.4 per cent.

Financial analyst, Tunde Ayileka, says the latest increase should not automatically be interpreted as a reversal of Nigeria’s broader movement towards electronic payments.

He noted that monthly movements in currency outside banks can be influenced by seasonal cash demand, economic activity, withdrawals by households and businesses, as well as the continued importance of cash transactions in the informal economy.

One important indicator is the relationship between physical cash and the wider money supply. CBN data show that broad money supply (M3) rose to N139.38 trillion in August, up 16.4 per cent from N119.69 trillion a year earlier. M3 increased by N601.6 billion from N138.78 trillion in July.

This means the rise in cash outside banks occurred alongside continued expansion of liquidity across the wider financial system rather than in isolation.